Congress Threatens Banks to Stop Foreclosures

31 07 2009

A senior House Democrat threatened banks that if they don’t volunteer to save more homeowners from foreclosure, Congress will make them.

In a sternly worded statement, Rep. Barney Frank said Congress will revive legislation that would let bankruptcy judges write down a person’s monthly mortgage payment if the number of loan modifications remains low.

Frank, chairman of the House Financial Services Committee, also said his committee won’t consider legislation to help banks lend unless there is a “significant increase” in mortgage modifications.

Frank’s statement was aimed at adding momentum to a deal struck Tuesday between Treasury Secretary Timothy Geithner and more than two dozen mortgage companies. The two sides agreed to set the goal of adjusting 500,000 loans by Nov. 1.

But it was far from clear whether that would happen.

Loan servicers say they are still trying to play catch up to a deluge of customer requests by hiring and training thousands of new employees. Banks also are trying to sort through which customers face a legitimate financial hardship.

Also, many loans have been bundled and sold to investors as securities, complicating efforts to modify the terms.

Congress tried earlier this spring to pass legislation that would give people a chance to keep their homes by filing for bankruptcy. But while President Barack Obama said he supported the measure, he did little to see it through and it was defeated amid an aggressive lobbying effort by banks.

The measure failed in the Senate by a 45-51 vote, falling 15 votes short of the 60 needed to overcome procedural hurdles.


The Obama administration, scrambling to get its main housing initiative on track, extracted a pledge from 25 mortgage company executives to improve their efforts to assist borrowers in danger of foreclosure.

In an all-day series of meetings at the Treasury Department, government officials reached a verbal agreement with the executives for a new goal of about 500,000 loan modifications by Nov. 1 and stressed the program’s urgency.

The sessions came amid concerns that the Obama administration will fall far short of its original goal of helping up to 3 million to 4 million troubled borrowers with modified loans.

As of this week, only about 200,000 borrowers were enrolled in three-month trial loan modifications, out of about 370,000 who were offered modifications by mortgage companies.

“Today’s meeting was an opportunity to identify ways to accelerate the program and bring relief faster,” Treasury Secretary Timothy Geithner said in a statement.

But mortgage companies also say the Obama administration – which announced the program in February – left the public with the impression that the program would be instantly available.

“It was very difficult as an industry as a whole to try to live up to those expectations,” said Dan Frahm, a Bank of America spokesman, who described Tuesday’s meeting as a “realistic” exchange about how the industry can improve its efforts and possibly expand the loan modification effort to more borrowers.

For months, borrowers, housing counselors and activist groups alike have complained that the process is a confusing, bureaucratic nightmare.

“There needs to be a lot more accountability and oversight,” said Brenda Muniz, legislative director for the community group ACORN, which has been holding protests around the country to draw attention to the slow progress of the administration’s plan.

Mortgage companies, she said, are “doing things that are just outright prohibited” under the plan.

Housing counselors say borrowers are being charged upfront fees and given inaccurate or confusing information about the program. The delays are long and, in some cases, lenders continue the foreclosure process while loans are being reviewed for a modification.

On Tuesday, an activist group in Minnesota filed a lawsuit seeking to stop home foreclosures in that state. Mark Ireland, an attorney with the Minnesota-based Foreclosure Law Relief Project, said the government has failed to establish the procedures needed to ensure the fair and uniform administration of the program. Loan servicers are not required to tell a homeowner why they were denied a loan modification.

“Decisions are made under a cloak of secrecy and there is no formal way to challenge these decisions,” Ireland said.

Even for those who are accepted, the process is often painful.

Alfred Robinson, 41, a bus driver in Kansas City, Mo. finally got a loan modification this month after a two-month struggle. He originally was told in early May that his income was too high to qualify and was offered a different — and much less favorable — loan modification by Washington Mutual, now owned by JPMorgan Chase & Co.

But two months later, the lender reversed course and offered him the Obama plan — that would lower his payment to about $950 a month. “They just dropped it a hundred bucks,” he said. A Chase spokesman declined to comment.

One reason progress has been sluggish is that loan servicers have had to hire and train thousands of employees. The loans have been bundled and sold to hundreds of investors as securities, which often have differing rules about loan modifications.

Plus, mortgage companies have been swamped with thousands of calls from borrowers who want to take advantage of the program, and must sort out who is facing a legitimate financial hardship.

Many servicers didn’t get set up to deal with the surge in problem loans and modifications until this year, said Thomas Lawler, a housing economist in Northern Virginia.

That, he said, “is pretty depressing because the problems have been going on for more than two years … It’s a bit of an indictment of the whole mortgage servicing industry.”

The industry, meanwhile, says the Obama administration’s program isn’t exactly simple to set up. It requires that mortgage companies verify borrowers incomes and submit numerous forms to the federal government.

“It’s not the most streamlined process,” said Paul Leonard, director of government affairs at the Housing Policy Council, a mortgage industry group.

Under the program, servicers can pocket up to $4,500 for each loan they modify. But they won’t start to be paid until homeowners have made on-time payments for three months.

If the program doesn’t kick in high-gear soon, the recent optimism about a real estate and economic recovery could fade as more borrowers fall into foreclosure, putting more downward pressure on home prices.

“Foreclosures are still rapidly escalating,” said Andrew Jakabovics of the Center for American Progress, a think tank with close ties to the Obama administration. “If we don’t get a handle on that … the economy is going to have a difficult time recovering.”

Source: The Associated Press

UNF Among Best College in Southeast

30 07 2009

The University of North Florida was named among the best colleges and universities in the Southeast by The Princeton Review.

UNF is among 141 top schools receiving the designation. The top schools are not ranked.

“We chose the University of North Florida and the other schools we recommend as our ‘regional best’ colleges primarily for their excellent academic programs,” said Robert Franek, Princeton Review’s vice president of publishing.

See report.

Source: The Princeton Review

Home Price Index Adds to Spate of Upbeat Housing News

29 07 2009

There were fresh signs that home prices in much of the country are stabilizing and the housing market is on the mend.

Home prices in May posted their first monthly increase since the summer of 2006, according to the Standard & Poor’s/Case-Shiller 20-city index. Prices rose from April in 13 of the cities tracked, notably Cleveland, Dallas and Boston.

The news follows upbeat reports showing sales of newly built and existing homes rose in June for the third straight month. And new home construction, while still weak, is the best it’s been since the fall.

The news: The 20-city home price index rose 0.5 percent from April to a reading of 139.84, but was still 17.1 percent below May a year ago.

The 10-city index rose 0.4 percent from April to a measure of 151, but was off 16.8 percent from May last year. It was the fourth consecutive month both indexes indicated prices have turned the corner and are heading back toward positive territory.

The 20-city index has lost more than 32 percent since its peak reading of 206.52 three years ago. That means home prices are back to mid-2003 levels.

The report: The Case-Shiller index measures home price increases and decreases relative to prices in January 2000. The base reading is 100; so a reading of 150 would mean that home prices increased 50 percent since the beginning of the index.

What it shows: The index tracks repeat sales of a designated group of homes in each city. By measuring the sales price of the same properties over time, the index prevents the data from being skewed by a change in the types of homes sold. Sales between related parties, such as family members, are excluded because they may not reflect true market values.

What it doesn’t show: The indexes only measure price data in 20 major metropolitan areas located in 15 states and the District of Columbia. So many areas of the country are not represented.

Why it matters: Investors closely watch the Case-Shiller indexes to gauge the level and direction of home prices. The indexes include a broader mix of properties compared to the index created by the Federal Housing Finance Agency. That index excludes many high-end properties, as well as homes bought with riskier mortgages or all cash.

The quote: “We may be on the way to recovery,” said Maureen Maitland, vice president of S&P’s index services. “I say ‘may’ because it’s only been a couple months of data and home prices are seasonal … It will take a couple more months to see if we have turned around.”

Source: The Associated Press

State, Florida Bar Offers Foreclosure Defense

29 07 2009

The state and Florida Bar Foundation are teaming up to provide legal help for homeowners facing foreclosure.

Attorney General Bill McCollum and bar officials announced that $4 million the state obtained through a settlement with Countrywide Financial Corp. would be dedicated to the effort.

Countrywide, now owned by Bank of America, lost billions of dollars on bad loans. In a lawsuit, McCollum accused Countrywide of using deceptive practices.

McCollum’s office and the foundation will make grants to nonprofit legal aid organizations so they can provide free services to homeowners who cannot afford lawyers.

The grants are expected to cover a two-year period beginning Oct. 1.

Source: The Associated Press

New Home Sales in U.S. Rise 11%

28 07 2009

There’s another positive sign that the housing market is recovering.

New home sales nationwide rose 11 percent in June to a seasonally adjusted rate of 384,000, according to the U.S. Department of Commerce.

Lower home prices and a drop in mortgage rates are fueling sales.

Last week, the Florida Association of Realtors reported sales of existing homes were on the rise, with distressed sales making up a big part of those numbers.

Experts say there is still a big backlog of homes in the foreclosure pipeline, which they expect will remain blocked well into next year.

Source: Jacksonville Business Journal

June Home Sales Up, Prices Down in Jacksonville

25 07 2009

Sales of existing homes rose statewide and in Jacksonville in June, according to data from the Florida Association of Realtors.

But the median sales price continued to fall compared to a year ago, with prices down in 19 of the 20 markets tracked by FAR.

Sales of single-family existing homes in Jacksonville were up 16 percent compared to June 2008. The median price was $162,100, down 18 percent from a year ago. The statewide median price was down 28 percent to $148,000, though it was up 2.5 percent from May.

Sales of condominiums in Northeast Florida were up 1 percent, but the median sales price fell 32 percent to $124,300. Statewide sales were up 39 percent and the median price of $112,900 was down 37 percent.

Sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes, according to housing industry analysts with the National Association of Realtors.

Nationwide, existing home sales rose 3.6 percent to a seasonally adjusted rate of 4.89 million units in June from a downwardly revised pace of 4.72 million in May, but was still 0.2 percent lower than in June 2008.

The national median existing home price was $181,800 in June, down 15.4 percent from a year ago.

The National Association of Realtors latest housing industry outlook notes the $8,000 tax credit for first-time homebuyers is boosting the sector. “Strong activity by entry level buyers is helping to absorb inventory and allow some existing owners to make a trade,” NAR Chief Economist Lawrence Yun said in a news release. But, he added, “the increase in sales is less than expected because poor appraisals are stalling transactions. The big question is how much the appraisal issue will impact the ability of contracts to go to closing.”

Source: Florida Association of Realtors

Bank of America Launches Foreclosure Relief Program

24 07 2009

Bank of America Corp. is mailing letters to borrowers who may be eligible for a foreclosure relief.

The program is part of an agreement the bank made with state attorneys general in October.

BofA has allocated up to $150 million nationwide to assist certain borrowers who experienced a foreclosure, short sale or deed in lieu of foreclosure on mortgages originated by Countrywide Financial Corp. BofA bought Countrywide in July 2008 for $2.5 billion.

Forty states are participating in the program. Borrowers will be notified by letter if they are eligible for a settlement payment. Payment amounts will vary.

Inquiries concerning the foreclosure-relief program should be directed to Rust Consulting at (866) 411-6987 or

The foreclosure-relief effort is one of three components of BofA’s agreement with the state attorneys general.

The second component, the National Homeownership Retention Program, is designed to achieve affordable and sustainable mortgage payments for up to 400,000 borrowers who financed their homes with subprime or payment-option, adjustable-rate mortgages serviced by Countrywide.

The third component provides relocation assistance to borrowers who experience a foreclosure sale and agree to leave the property voluntarily. They are eligible to receive a cash payment to ease their transition to a new place of residence.

Additional information is available at

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